Piggy banks are still the saving method of choice for 5% of the UK's savers, according to new research.
Newcastle Building Society carried out a survey, asking 1,300 people whether they keep their money in savings accounts or at home. The results showed that the amount of cash being saved at home could add up to as much as £2.4billion, if the findings were extended to the whole of the UK.
The research highlighted that it was younger people, typically between those aged between 18 and 24, who are clinging on to their piggy banks, suggesting they don’t know what to do with their money. Around 8% in this age group admitted to saving at home, compared with just 2.3% of the over 65s.
Low interest rates and continued disillusionment with financial institutions were factors blamed for the tendency to avoid using savings accounts or ISAs.
Steve Urwin, Senior and Marketing Executive, Newcastle Building Society said: “Although interest rates remain at historically low levels there are still some good deals to be had, and in particular savers should look to take advantage of their ISA allowance which allows them to receive interest tax free.
“It is important that any money they've earned is working as hard as it can for them. Without doubt it makes sense to invest money in a bank or building society rather than in a piggy bank at home.”
The most popular savings measures are instant access savings accounts and cash ISAs, with 30% of those taking part in the survey choosing these options.
It also showed that few people are locking their money away in longer term fixed rate savings accounts, regardless of higher interest rates for these products (1.5% said they would save in equity ISA and just 1% preferred stock market linked investments.)
To compare the best savings account deals click here »
© Fair Investment Company Ltd